Key Points
- The Euro after trading as low as 1.1095 started to recover ground vs the US Dollar.
- The EURUSD pair is recovering, but facing sellers near the 100 hourly simple moving.
- Euro Zone CPI released by the Eurostat preliminary reading came in at -0.1% in May 2016, just as the market expected.
- The Euro Area Unemployment Rate remained flat at 10.2% in April 2016, as per the forecast.
Technical Analysis
The Euro after declining as low as 1.1095 vs the US Dollar gained bids and traded higher. During the upside move, it broke the 50 hourly simple moving average, and currently finding sellers near the 100 hourly SMA.
Looking at the current momentum, there is a high chance of it breaking the 100 hourly SMA, but may face sellers near a bearish trend line.
On the downside, 50 hourly SMA may provide support to the EURUSD pair if it moves down.
Euro Zone CPI
Today in the Euro Zone, the CPI which captures the changes in the price of goods and services was released by the Eurostat. The forecast was lined up for a decline of 0.1% in May 2016, compared with the same month a year ago (preliminary reading).
The result was as per the forecast, as the Euro Zone CPI came in at -0.1%. The report stated that “Looking at the main components of euro area inflation, services is expected to have the highest annual rate in May (1.0%, compared with 0.9% in April), followed by food, alcohol & tobacco (0.8%, stable compared with April), non-energy industrial goods (0.5%, stable compared with April) and energy (-8.1%, compared with -8.7% in April)”.
Overall, there is a chance of the Euro gaining further, but the bearish trend line resistance may come into play on the upside.
